The long-term consequences of economic policies for children's development and healthy families have both theoretical and practical import. Almost all extant studies testing income effects on children and families are non-experimental; therefore, they are subject to the criticism that unmeasured correlates of income may account for all or part of the effects observed. This is a proposal to assess the impact on family functioning and child well-being of the New Hope Project, a 3-year random-assignment experiment designed to test the effectiveness of a multifaceted employment-based anti-poverty program for families who are economically poor. Because its goal is reduction of poverty, New Hope rests on different assumptions than many interventions designed to reduce welfare dependence. It provides job-search assistance, wage supplements that raise income above the poverty threshold, and subsidies for health insurance and child care in a rigorous random assignment experimental design; hence, it represents a strong test of the causal effects of income, benefits, and employment on family functioning and child development. Because control group members are also affected by changes brought about by the 1996 Personal Responsibility and Work Opportunities Act, this project offers information that is especially pertinent to public policy affecting the working and nonworking poor. An extensive survey, funded by the MacArthur Foundation, is currently being completed 24 months after the point of random assignment to families with one or more children ages 3 through 12. Information is collected on parents' income, employment, use of child care, health care, psychological well-being, and parenting practices. Children's educational progress, aspirations, school motivation, well-being, and social behavior is assessed using information collected from parents, children, and teachers. This proposal seeks funding to: (i) complete the 24-month analysis; (ii) collect and analyze ethnographic data from 40 experimental and 20 control families between 24 and 60 months after random assignment; (iv) collect and analyze data from a survey administered to sample families 60 months after the point of random assignment. The primary analytic questions are the extent to which: (i) the likely increase in maternal labor supply alter family schedules to the benefit or detriment of children; (ii) the higher incomes occasioned by the wage supplements translate into resources for children; (iii) social-psychological changes in adults' stress or self-esteem are affected, and (iv) how all of these changes in turn affect family life and children's well-being, educational progress, and social development in early childhood through early adolescence.